Section 5. (a) All rates shall be made in accordance with the following provisions:—
1. Due consideration shall be given to past and prospective loss experience, within and outside this commonwealth, to catastrophe hazards, if any, to a reasonable margin for underwriting profit and contingencies, to investment income on unearned premium reserves and loss reserves, to dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers, to past and prospective expenses both countrywide and those specially applicable to this commonwealth, and to all other relevant factors within and outside this commonwealth.
2. The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.
3. Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses.
4. Rates shall not be excessive, inadequate or unfairly discriminatory.
(b) Except to the extent necessary to meet the provisions of subdivision 4 of subsection (a) of this section, uniformity among insurers in any matters within the scope of this section is neither required nor prohibited.
(c) Nothing in this section shall be taken to prohibit as unreasonable or unfairly discriminatory the establishment of classifications or modifications of classifications or risks based upon size, expense, management, individual experience, purpose of insurance, location or dispersion of hazard, or any other reasonable considerations, provided such classifications and modifications apply to all risks under the same or substantially similar circumstances or conditions.
(d) Nothing in this chapter shall abridge or restrict the freedom of contract between insurers and agents or brokers with respect to commissions or between insurers and their employees with respect to compensation.
(e) Two or more insurers who by virtue of their business associations in the United States represent themselves to be or are customarily known as an “insurance company group”, or similar insurance trade designation, shall have the right to make the same filings or to use the same rates for each such insurer subject to the provisions of subdivisions 1 to 4, inclusive, of subsection (a) of this section; and nothing contained in this chapter shall be construed to prohibit an agreement to make the same filings or use the same rates and concerted action in connection with such filings or rates by such insurers.
This subsection shall not apply to two or more insurers who are not under the same common executive or general management or control and who act in concert in underwriting groups or pools.